How LGBTQ Economic Equality Benefits Everyone

By Oliver McNeil and Spencer Watson

In The Economic Case for LGBT Equality, M.V. Lee Badgett makes a profound yet straightforward argument based on the latest economic data available globally about the LGBTQ community. Badgett shows that the costs of discrimination against LGBTQ people add up into more significant harms to individuals, local economies, and national and global economies as well.

The economic case Badgett presents advances new ways to encourage leaders and institutions to support fair and equal treatment for LGBTQ communities. Badgett shows in dollars and cents how everyone—including individuals, businesses, communities, and the entire economy—benefits from reduced stigma against and greater inclusion for LGBTQ individuals and their contributions to society.

The economic case is a powerful complement to, and not a replacement for, other values or rights-based arguments for LGBTQ equality. “[T]he economic case needs a foundation of human rights just as much as the human rights argument can be made more forceful by consideration of the cost of withholding them,” Badgett says.[i]

“[T]he economic case needs a foundation of human rights just as much as the human rights argument can be made more forceful by consideration of the cost of withholding [rights]”

Lee Badgett, The Economic Case for LGBT Equality

The economic case proposes new reasons to advance LGBTQ equality, especially in public policy or institutional contexts, where human-rights arguments and market-based arguments often collide. Badgett shows that by using the economic case, activists can make more compelling arguments to advance LGBTQ rights. Also, legislators and business leaders can support and enact LGBTQ-inclusive policies, and international institutions can do more to support the well-being of the LGBTQ community globally.

The Economic Case

Badgett first looks at how LGBTQ people are shut out in schools, face more obstacles in the workplace, and have poorer health outcomes, exploring the negative economic consequences for individuals. Then she adds up the cost of discrimination to businesses, governments, and economies. Badgett successfully shows how everyone loses out when LGBTQ cannot learn, work, or live at their full potential, and so discrimination is costly to us all.

Individuals & Households

Education

Badgett starts with analyzing the effects of the issues that plague LGBTQ youth during their years at school. Many LGBTQ students suffer anti-LGBTQ bullying and harassment by their peers and face homophobic teachers, school officials, and policies.[ii] Pervasive harassment and discriminatory treatment contribute to lower grades, higher rates of absenteeism, and more anxiety and suicide attempts among LGBTQ students than for cisgender and heterosexual peers.[iii]

Unfair treatment for LGBTQ students persists in higher education, as well.[iv] And even though LGBTQ individuals frequently attain higher educational levels than cisgender and heterosexual peers, they also frequently pay more out of pocket to do so. LGBTQ student loan borrowers often have higher debt burdens than their straight peers do, and they more often struggle to repay those loans out of their smaller earnings later in the workforce.

Work

Next, Badgett shows that after graduating into the workforce, LGBTQ workers face a labor market with steep barriers to entry. She explains that LGBTQ workers are less likely to be employed than their heterosexual and cisgender workers. When they are employed, they also face visible and invisible barriers that inhibit them from advancing professionally.

Badgett also notes several ways that LGBTQ workers struggle to obtain employment or advance in the workplace. Resumes for LGBTQ candidates are less likely to receive interviews than cisgender and heterosexual applicants.[v] At work, toxic work environments and stigma inhibit LGBTQ workers’ ability to thrive and advance professionally. In 2017, 1-in-5 LGBTQ Americans, overall, reported experiencing harassment at work. Transgender workers and queer people of color reported even higher rates of harassment than their cisgender and white LGBTQ peers. 2-in-5 transgender workers and 1-in-3 QPOC reported harassment on the job.[vi]

There are less visible costs to LGBTQ workers as well. To avoid rejection or harassment, LGBTQ workers suffer an additional “cost of the closet” by hiding personal information about themselves and their partners from coworkers. Avoiding conflict and remaining in the closet creates additional stress that negatively affects their morale, health, productivity, and earnings.[vii]

As a result of discrimination at work, LGBTQ workers also tend to earn less and have higher rates of poverty than their cisgender and heterosexual peers. Gay and bisexual men earn roughly 11% less than straight men, and lesbians may have a slight 9% wage advantage compared to heterosexual women. Still, both groups of women suffer income and wealth gaps based on their gender, which helps explain why lesbians still have a similar rate of poverty (17.9%) as straight women do (17.8%), both of which are greater than the rate for gay men (12.1%).[viii] There is limited available data about transgender people’s income, but Badgett examines one survey 2014-2017 in the United States, showing that income for transgender individuals was 17% less than cisgender men. Badgett also observes that the annual earnings for transgender women have been shown to fall 18% after they transition, but trans men had been shown to have roughly the same wages as they did pretransition.[ix]

“There’s another way to view the barriers, funnels, walls, and even the pay gaps: we all pay for this discrimination in wasted time and effort.”

Lee Badgett, The Economic Case for LGBT Equality

“There’s another way to view the barriers, funnels, walls, and even the pay gaps: we all pay for this discrimination in wasted time and effort” Badgett rightly observes.  She also notes that despite workplace issues and financial obstacles they create, LGBTQ people continue to find ways to thrive individually and collectively. “Resilience in responding to stigma or violence and perseverance in constructing a community and life might be the main weapons LGBT people have,” Badgett says. “Resilience, then, is a process and way of being that can help individuals, but the ability of LGBT people to be resilient does not let society off the hook in making the world less homophobic and transphobic.”

Health & Wellbeing

Badgett explains to readers how overt and implicit homophobia and transphobia negatively affect LGBTQ individuals’ physical and mental health, creating additional financial costs. Some adverse health effects directly result from anti-LGBTQ stigma, such as psychological and physical scars from ongoing violence and hostility. A 2013 study found that nearly a third (30%) of LGBT people had been threatened with violence or physically attacked.[x] Transgender individuals experience even higher rates of harassment, Badgett observes, recalling a 2015 study showing that 47% of transgender people reported being assaulted in their lifetime.[xi]

LGBTQ individuals suffer additional adverse health effects resulting from social exclusion and harassment. Stressful events, internalized homophobia and transphobia, fear of rejection, and managing a concealed identity lead to more physical and mental health problems for LGBTQ people by inducing minority stress. This minority stress is, essentially, anxiety caused by minority status and stigma. Minority stress helps explain why the LGBTQ community tends to report higher rates of suicide, substance abuse, and depression.[xii]

Discriminatory problems also affect LGBTQ individual’s ability to get adequate medical care. Poverty and underemployment impair LGBTQ individuals’ ability to cover their healthcare through insurance or afford care out of pocket.[xiii] When they do seek healthcare, discrimination by healthcare professionals obstructs LGBTQ patients’ ability to get the competent care they need. 18% of LGBTQ people in the U.S. reported they had avoided seeking medical care because of a lack of competency in LGBTQ health issues.[xiv] Transgender and gender-nonconforming patients are dead-named or misgendered,[xv] and LGB patients hesitate to discuss their sexual health histories with providers.[xvi]

Businesses

Badgett then shows how, in addition to economic harm to individuals, discrimination against LGBTQ communities is costly for businesses. So business leaders should feel motivated to improve LGBTQ-equality as well. “The business case for LGBTQ equality argues that equal treatment is good for the bottom line,” explains Badgett because “[w]hat businesses want is simple: higher profits.”

“The business case for LGBTQ equality argues that equal treatment is good for the bottom line.”

Lee Badgett, The Economic Case for LGBT Equality

Badgett shows that more fair and equal workplaces lead to better outcomes for both employees and firms and increased productivity and profitability for companies. Badgett notes that workplaces with greater workplace protections for LGBTQ people have more committed employees, higher stock prices, and more welcoming workplace cultures overall.[xvii]

She also notes that environments with more tolerant policies toward LGBTQ communities also tend to do better, and attract more creative professionals overall—LGBTQ and non-LGBTQ alike. Badgett recounts a 2016 study of the number of patents produced by firms in States with nondiscrimination protections for LGBTQ people compared to those without such protections, which showed that companies in the LGBTQ-equality States attracted the most productive inventors. Badgett observes that: “So far… the existing research tells a consistent story that supports the business case: what’s good for LGBT employees is good for their employers.”[xviii]

“So far… the existing research tells a consistent story that supports the business case: what’s good for LGBT employees is good for their employers.”

Lee Badgett, The Economic Case for LGBT Equality

Adding it All Up: The Economy

The corrosive costs of anti-LGBTQ discrimination add up quickly for local, national, and global economies. Badgett compellingly shows that the significant psychological and financial costs of discrimination deter LGBTQ individuals from making their fullest contributions to society and prevent society from benefiting from those contributions.

When qualified LGBTQ workers are not hired or are prevented from advancing professionally, businesses lose out on productive workers and spend more money training less skilled employees. And when LGBTQ citizens suffer from mental and physical health issues that affect their productivity, businesses and society lose out on the profits and benefits of their professional contributions.

Badgett estimates there is around a 10% loss in wages and productivity due to LGBTQ exclusion in countries that are considered LGBTQ tolerant.[xix] Using India as a model, Badgett shows the total social, health, and economic losses resulting from anti-LGBTQ exclusion to be up to 1.4% of the country’s gross domestic product or $26 billion annually. “So in a sense,” Badgett explains, “homophobia and transphobia puts economies in a permanent recession, with economic output below what the people of the country could produce.”[xx]

“So in a sense, homophobia and transphobia puts economies in a permanent recession, with economic output below what the people of the country could produce.”

Lee Badgett, The Economic Case for LGBT Equality

Alleviating this permanent recession induced by LGBTQ exclusion should be a clear motivation for leaders and governments to promote LGBTQ equality, Badgett argues. Through greater inclusion in society and the economy, LGBTQ workers would have higher incomes, buy more consumer goods, and have higher productivity levels. Those positive benefits would generate more GDP and activity for the economy and produce more tax revenue for governments.[xxi]

Conclusion

In her book, Badgett shows how actions to improve the economic health and well-being of LGBTQ individuals, businesses, and communities will also enhance well-being for all of us. Badgett suggests a host of ways that the economic argument can be used to advance economic equality for LGBTQ communities, including:

  • Increasing funds to LGBTQ organizations domestically and worldwide: Currently, only 17 cents out of every $100 invested globally goes to LGBTQ issues.[xxii] Corporate giving accounts for a small percentage of the funding sources. More funding means that more LGBTQ people have access to resources to overcome barriers, like mental health groups, housing help, and community gatherings
  • Utilizing the economic case to persuade lawmakers and business leaders to enact LGBTQ-inclusive legislation as a cost-saving measure: Countries with progressive policies — including laws outlawing bullying of LGBTQ students, banning conversion therapy, and ensuring asylum for LGBTQ individuals fleeing harmful nations — attract more business and tourism by welcoming the LGBTQ community. After countries enact laws protecting the LGBTQ community, attitudes about LGBTQ people tend to improve as well.
  • Calling on institutional help through international organizations: Collective action on LGBTQ issues is a necessity. Agencies like the World Bank and the United Nations offer essential institutional hands to push the economic case in policy and investment decisions worldwide.
  • Improving data collection: Without high-quality data on the LGBTQ community, the economic case falls short. Badgett suggests that existing research infrastructures need to be expanded to include the community and gain more knowledge about their economic well being.

“With good strategies to move forward worthy goals, the economic harm of homophobia and transphobia can begin to be reversed and human rights for LGBTQ people realized.”

Lee Badgett, The Economic Case for LGBT Equality

Much more work must be done to remedy the stigma and bigotry that holds LGBTQ people, and other under-represented communities, back in our present economy. Badgett’s economic case advances a new set of tools to effectively make the case for LGBTQ rights and dignity—in dollars and cents—which can help engage new allies and motivate informed solutions to improve well-being for the LGBTQ community. As Badgett puts it: “With good strategies to move forward worthy goals, the economic harm of homophobia and transphobia can begin to be reversed and human rights for LGBTQ people realized.”[xxiii]


[i] M.V. Lee Badgett, The Economic Case for LGBT Equality: Why Fair and Equal Treatment Benefits Us All 139 (1989)

[ii] Badgett, supra note 1 at 27.

[iii] Badgett, supra note 1 at 23.

[iv] See Stephanie Mollborn and Bethany Evertt, “Understanding the Educational Attainment of Sexual Minority Women and Men,” Research in Social Stratification and Mobility 41 (2015): 40-55, https://doi.org/10.1016/j.rssm.2015.04.004 (Finding lesbian and bisexual women were less likely to enroll in and complete college, while gay and bisexual men that had same-sex experiences as young adults were less likely to get a bachelor’s degree. For information on lesbian and bisexual women); See also Donald C. Barrett, Lance M. Pollack, and Mary L. Tilden, “Teenage Sexual Orientation, Adult Openness, and Status Attainment in Gay Males,” Sociological Perspectives 45, no. 2 (2002): 163-82, https://journals.sagepub.com/doi/10.1525/sop.2002.45.2.163

[v] Badgett, supra note 1 at 40.

[vi] Pew Research Center, A Survey of LGBT Americans: Discrimination in America: Experiences and Views of LGBTQ Americans (2017) https://legacy.npr.org/documents/2017/nov/npr-discrimination-lgbtq-final.pdf

[vii] Badgett, supra note 1 at 43-44

[viii] Williams Institute, LGBT Poverty in the United States: A Study of Differences Between Sexual Orientation and Gender Identity Groups 2 (2019) https://williamsinstitute.law.ucla.edu/wp-content/uploads/National-LGBT-Poverty-Oct-2019.pdf

[ix] Badgett, supra note 1 at 56.

[x] Badgett, supra note 1 at 73; Richard Florida and Gary J. Gates, Technology and Tolerance: The Importance of Diversity to High Technology Growth (2001)

[xi] Badgett, supra note 1 at 73; Richard Florida, “the global map of homophobia,” CityLab, Atlantic (February 7, 2014)

[xii]  Id. at 69-74.

[xiii] Pew Research Center, supra note 6.

[xiv] Pew Research Center, supra note 6.

[xv] Badgett, supra note 1 at 82-84

[xvi] Pew Research Center, supra note 6.

[xvii] Badgett, supra note 1 at 106.

[xviii] Badgett, supra note 1 at 94;

[xix] Badgett, supra note 1 at 114.

[xx] Id. at 120.

[xxi] Badgett, supra note 1 at 127.

[xxii] Badgett, supra note 1 at 155.

[xxiii] Badgett, supra note 1 at 165.

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